How Artificial Intelligence Benefits Commercial Real Estate Investors
Advances in artificial intelligence and machine learning are slowly changing the processes of buying and selling commercial real estate. Although widespread adaptation appears to be several years off, the application of new technology within commercial real estate appears inevitable and of enormous value. In particular, the opportunity appears greatest within the realm of property valuations, according to David Mitchell, business intelligence and operational specialist with Chicago-based Alliant Credit Union.
“Developing more accurate evaluation techniques will help set healthy interest rates and lower credit costs,” he says. “This points to more efficient loan capital in the market. That’s the ultimate outcome: more efficiency and more liquidity in the market.”
Valuing commercial real estate is a tremendous exercise in synthesizing information, Mitchell notes. “Understanding factors such as rental rates, vacancy rates, employment growth, demographics, new construction supply, interest rates and capital availability are not simple propositions. Understanding the interdependence of these variables, as well as accounting for historical data and knowing how to properly weight the variables is more than any one human can synthesize in a rigorous manner.”
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